Foreign Relations of the United States, 1947, Eastern Europe; The Soviet Union, Volume IV

861.5151/12–1547: Telegram

The Chargé in the Soviet Union (Durbrow) to the Secretary of State

restricted
niact   us urgent

Moscow, December 15, 1947—7 p. m.

3375. Full text transmitted Embtel 3374 December 15¹ Soviet decree subjecting cash holdings foreign missions and private foreign citizens to obligatory conversion old rubles for new at same 10 to 1 rate applying Soviet citizens (Embtel 3367, December 14); moreover, changing diplomatic rate exchange from 12 rubles for 1 dollar to 8 for l.² This amounts confiscation 90 percent cash holdings of Embassy and personnel as reported Embtel 3336, December 9,³ and automatic ⅓-cut in ruble equivalent salaries and allowances of personnel.

We propose to protest decree through Foreign Office on basis that all rubles on hand are result official conversion dollars or official payment Russian Government agency for magazine Amerika. We shall endeavor obtain 1 for 1 conversion at least 1 month’s normal drawings, as allowed foreign missions operating through bank accounts, as well as same conversion of payments for magazine Amerika, arguing in latter case decree constitutes violation contractual obligation. Please give us urgent instructions to proceed vigorously on these lines. However, we must immediately have new currency in order to operate Embassy and make possible day to day existence American and Soviet personnel pending outcome our protest which will inevitably require some time as Department knows. Therefore, in separate telegram we are requesting immediate transfer of funds to meet payroll now due and other current expenses. We propose operate exclusively with these new funds, retaining old ruble currency pending outcome negotiations. Necessity for prompt readjustment salaries and allowances will be apparent to Department because of new exchange rate and I hope immediate action can be taken on lines suggested Embtel 3335, December 8.⁴

Sent Department 3375, sent London for Ambassador Smith 384.

Durbrow

1. Not printed; see footnote 1, p. 635.
2. The decree No. 4005, as translated in telegram 3374, explained: “In connection with the increased purchasing power of the ruble as a result of the monetary reform and abolishment of the card system to change the present preferential rate and to establish a temporary new preferential rate, namely: 8 rubles for 1 American dollar or 32 rubles 24 kopeks for 1 pound sterling, or 185 rubles 49 kopeks for 100 Swiss francs, or 222 rubles 20 kopeks for 100 Swedish kroner.” (861.5151/12–1547)
3. Not printed.
4. Not printed. In this telegram the Chargé recommended that the Department should have in mind the “possibility that impending issuance new Soviet currency, readjustment prices, and stabilization ruble may bring with it abolishment diplomatic rate of exchange. Accordingly imperative that Dept have prepared necessary financial measures permit uninterrupted operation Embassy and retention stand on such contingency.” (124.615)